[DCEite]

Consider this: In the twin cities of Noida and Greater Noida , only a handful of shopping malls like DLF Mall of India, Gaur City mall and Grand venice Mall see a meaningful footfall. Whereas there are umpteen malls that have been converted to "Ghost Malls" with vacancy rates as high as 90%. Those who are surviving have had to change their business model and cater to a specific niche. For example : Garden Galleria mall is now almost exclusive to pubs and nightclubs, Star City malls which only sells liquor etc.

Malls like Wave Mall, Galaxy Bluesapphire, Galaxy Diamond plaza, Ansal Plaza (Delhi), and numerous others have been converted to Ghost malls, with high vacancy rates, very low rental yields, and stuck money of gullible investors who bought shops here at inflated prices from speculators.

A related video on the same:

https://youtube.com/watch?v=cyFG2d1pkP4

And not just in Noida or other city in India, malls in the US are now getting converted to studio apartments !

Here is a related documentary on CNBC:

https://youtu.be/J1GIF6VNipE?feature=shared

Some of the reasons of the decline of shopping malls in India:

1. E-Commerce: Consumers now have a variety of products just at the click of a button. E-Commerce sites like Amazon, Flipkart have boomed exponentially, specially post Covid in India

2. Q-Commerce: Quick commerce companies like Blinkit, Zepto and Bigbasket have redefined consumer shopping and a lot of consumers are opting for E and Q commerce rather than going to malls for general shopping.

Of course they are other reasons as well, but the Ghost mall culture should come as a warning to any potential commercial real estate investor. Choose your space carefully, or your investment can go really bad !

[SilverSmoke]

Not to downgrade physical shops, in my life, E shopping has intruded to much extent.

I find it way easy & a great time saver. It takes less energy & lesser mental engagement than even to ask my assistant to get it done from a shop nearby.

Only I keep away from online shopping are the expensive electronics & exclusive clothing / footwears - rest all coffee to bathing bars to casual clothing to keyfob cells are coming online.

[amol4184]

This makes sense. If I look at my own shopping habits, I have gone to a mall only once in year 2024 and may be twice in 2023 to take some relatives to one of the biggest malls in the area because they wanted to see an American mall.

There used to be a time when we would go to malls for no reason at all and come back with bags full of stuff. Now I get those bags delivered to my door through Amazon or numerous other websites.

I noticed that walking in mall is very tiring. I could pedal my bicycle for 150kms in a stretch but I can't walk periphery of the mall without tiring myself out. Its exhausting. May be others feel the same too? The only mall like structure I like going to is IKEA.

As for investment in those tiny shops inside malls, I came *very* close to buying a shop in one of the ghost malls in Pune. Every time I pass by it I thank my stars and people who put sense in me to not buy it and instead go for a flat.

[fhdowntheline]

NCR's ghost malls are largely due to the over capacity and hype surrounding the " mall" concept when it first blossomed about 2 0 or so years ago. Whereas in many tier 2/3 towns, there is a need for good medium scale malls to channelize retail shopping. Those ghost malls came into existence when everyone who was anyone wanted to be seen living and shopping in NCR. Obviously, times have changed and other small towns have mushroomed.

There is a ghost mini mall in the vicinity of my locality too. A most ill planned venture that came in before it's time, and never really took off.

[naveen.raju]

From my perspective, people here in Kerala consider malls as "one stop destination" for the entire family. They want good parking, restaurants, movie screens and play area for the kids. Have all these, and the mall tends to do well which is a reality. There's a good amount of wait time from the time you enter the biggest mall here and to park the car. Weekends here are super crowded while weekdays have decent crowd. And they are opening malls in every big city in Kerala.

People consider we are in short of malls and are requesting more to open and there are few under construction. Maybe once we have a lot of malls, things might change but as of now, malls are "the" thing here.

Here's another one which they have started construction.

[DetectiveMiles]

For me Online shopping is convinent for multiple purchases, but I continue to got to local shops also. Malls are mostly limited to movies.

Factors for me are:

- Footwear - Wider range is available at my size (11) while shops have it only till 10 for most items.

- Garments/Fashion - Online has wider range(I buy from trusted brands and limited websites due to size and quality), Brand stores in Malls are said to be latest fashion mostly priced higher. I generally stick to same old fashion which I wear, so for me style and design from last year doesn't matter, making it cheaper online.

Whereas groceries and vegetables, I find local shops/supermarkets are better than online, both in pricing and quality, except for few niche items.

[ValarMorghulis]

Malls are thriving in Bangalore. I'm not sure if all but the popular and big ones are always crowded. Good luck setting your foot in one of the below during a weekend:
1. Phoenix Mall in Whitefield.
2. VR next to it.
3. Mall of Asia (good luck to you if you plan to visit it during the Xmas days).
4. 1MG Mall.
5. Nexus Koramangala.

See, the malls require few basic things like:
1. Food court & fine dine restaurants: To attract every demographic.
2. Breweries and Pubs.
3. Movie theater: For families making it an evening or a day out (movie, dinner, shopping).
4. Few all-apparel stores like H&M, Zara, Westside, etc.
5. Play arena with toys, and video games: To keep the toddlers engaged.
6. An open area for performances: Stand-ups, music shows, magic shows, etcetera.

You have the above and you are set.

PS: For some reason, presence of at least one of McD or KFC or Burger King seems to prop up a lot of crowds too.

[DicKy]

End of shopping mall era has been talked of globally since the 1990s (mostly US centric cases).

IMHO, it is a cyclic thing. When I grew up in Riyadh in the 90s, department stores/foodmarkets/shopping centres/ shopping arcades/plaza/souqs were all over the place. But there was just one or two of what we see as the modern shopping mall, which was mostly frequented by western expats. But by the turn of the millenia, the modern shopping malls started cropping up everywhere and it was almost a weekend affair of discovering new and new shopping malls. Each having some sort of novelty to attract people. There was one which had a large pool in the atrium, while there was another mall that had ...wait for it...a zoo that had everything except large animals and carnivores. All these shopping malls had a life of 2-3 years before going bust or start losing business.

First shopping mall experience in India was in Bengaluru and had a few cultural shocks for that time.

Coming to the late 2000s and early 2010s, Kochi had a few shopping malls up and running. But by the time I did my MBA in Kochi and had to do research as part of studies, the smaller malls in Kochi were struggling. LULU had opened its first mall in India and all the traffic was concentrated there. Saw the smaller malls hanging on for dear life by holding events in their premises, while one shopping mall which was the largest when opened had only a KFC outlet and a movie multiplex in its premises by 2015.

Closer home, in my home town Thiruvananthapuram, things were weird. For some reason, the city didn't have any shopping malls to speak of for decades. It had old style shopping complexes/centres, but modern shopping malls? Nope. Even smaller towns in Kerala had small shopping malls springing up. Our first shopping mall opened on 2018. Yes. 2018. You heard it right. The capital city of Kerala got its first proper shopping mall in 2018, and am pretty sure most BHPians living in the metro cities already had been fed up of shopping malls by that time as online shopping had picked up big time in the 2010s. Must be the same case in rest of the smaller cities and towns in India which have pent up demand. Kids and teenagers love to hang out at malls. One can speak of European style squares/streets/open cafes et al, but in our climate one needs air conditioned facilities to hang out during daylight. Nightlife streets are cool, but most kids and teenagers would be at home by that time. Now my city has two malls which is frankly enough for the current market size and demand, given that one is decent sized and the other is one of India's largest shopping mall. A third one is coming up which is more of a luxury mall concept. With that third one we are all set. Distractors did say that the smaller first mall will shut down when the larger mall opened. Smaller shops will be forced to shut down. Shops in MG road and CBDs will shut down blah blah. Nothing of that sort happened.

IMO, a shopping mall should have four major things going on to survive in Kerala. An anchor store, a multiplex, a food court and ample parking. And frequent events happening in the atrium area.

[anandhsub]

"Shopping" Mall is likely extinct but Malls are nowhere close to being. They have just transformed into a play area ( for both kids and adults), food courts, cafes, high end restaurants and some even have open air spaces for concerts.

I like going to a Mall even to just have coffee just for the ease of parking. I dont remember the last time I bought something in a mall.

[mayukh42]

It all comes down to where you get the best deals.

In the West, malls have big warehouse like shops (closest example in India - Decathlon) where you can get things at all budgets. Most footfalls are always at these places, and the few "aesthetically" designed thematic shops are as as empty as their number of items on display, precisely because almost all items are expensive.

In India, malls usually have higher price of goods compared to the street shops. Malls were once looked at as a convenient all-in-one place to shop compared to typical over-the-counter retailers who would get overwhelmed when number of customers were more than number of staff. But the greedy mall management thought of overcharging for this experience, and in the long run that doesn't work. So even when there is a crowd, it mostly does not translate to increased revenue because the crowd is there just for window shopping, and the AC. Even the food courts are not of good quality when they are not crowded and you can get a seat.

People who are fine with buying stuff at higher price just because of the ambience, will simply go to a brand/ mall dedicated to just that, like UB City in BLR.

Only category of malls that will be in profits are the ones where price is not high, like DMart or Big Bazaar (now Reliance Mart) or Decathlon.

Though e-commerce often is cited as the reason and rightfully so, I believe if brick and mortar shops offer competitive pricing people will flock to them and outlive the convenience of e-commerce. Similar to movie producers blaming OTT for lack of profits (rightfully so) but the real issue is quality of movies - a good movie will still draw crowds.

[IamNikhil]

Majority of the "Malls" are functional mostly due to heavy footfalls at the foodcourts, kids' play areas and the multiplex within their premises. Brand shops have barely any footfall. The advent of e-commerce has sounded the death knell for physical stores.

Also, if you compare the prices between a product that retails in a brand shop within a mall v/s the prices offered on online apps, there is a difference, primarily owing to the discounts and plethora of payment offers on these apps.

Personally speaking, I have not visited a mall for any kind of shopping in the past 5 years. The convenience of ordering from an app is unparalleled.

[ralto]

I had once watched a documentary on Ghost malls of US sometime back and was quite surprised. But now this trend is slowly likely to follow here in India too, but maybe will be slow.

Few local observations:
1. In Chandigarh tricity area we had 2 major malls: Elante and VR Punjab. The first one is booming and second one is slowly becoming deserted.
2. Elante (Chandigarh) is booming because all good shops and stores are there and it has maintained it's footfall and no good mall has come up in Chandigarh.
3. VR Punjab (Mohali) started off well, but recently I visited and it had more shops empty than taken. On the other hand a new one called CP67 is taking up more footfall, even though the space is better in VR.
4. I feel malls in real estate terms is kind of a ponzi schemes for investors. Eventually in most malls, ROI falls down and investors don't get the returns they were made to believe.
5. In Mohali area, there are 4-5 new malls now and few more coming up. I personally feel there won't be enough good shops/showrooms to occupy that much space and even if they do, there will be enough available spaces to negotiate for low rents.
6. While typing, just realised, there were 2 more malls in Chandigarh, that were built around same time as Elante, named City emporium and Centra, and both are barely surviving. A lots of empty shops or frequently switching tenants, I only visited one of these as I had a co-working space there for sometime. Goes on to show that there are only a few malls that survive.

I am happy to be proved wrong on the trend. I think a fair amount of investors are getting duped in this. Again, some of it is not really completely clean money so should we even feel bad for all investors ?

[SoumenD]

We are one of those early adopters of E-Commerce who relied heavily on them even before covid, so its been BAU for us. But for some specific stuff we still prefer malls like shoes and clothes which warrant a trial. Hence, once a month atleast we do visit a mall and along with shopping, we eat at restaurants/food-court there and kid enjoys in the play area. More like a family outing.

Atleast in Bangalore I still see pretty decent foot-fall in malls. On prime days like Saturday evening or Sunday afternoon they are pretty crowded.

[sunikkat]

On the contrary the malls in Bangalore are always crowded, weekends are crazy. And there are more malls opening and the new ones are seeing a massive crowd too.

[Maverick Avi]

Originally Posted by DCEite

Some of the reasons of the decline of shopping malls in India:

1. E-Commerce: Consumers now have a variety of products just at the click of a button. E-Commerce sites like Amazon, Flipkart have boomed exponentially, specially post Covid in India

2. Q-Commerce: Quick commerce companies like Blinkit, Zepto and Bigbasket have redefined consumer shopping and a lot of consumers are opting for E and Q commerce rather than going to malls for general shopping.

Of course they are other reasons as well, but the Ghost mall culture should come as a warning to any potential commercial real estate investor. Choose your space carefully, or your investment can go really bad !

Another reason that I observed is during COVID people avoided crowded places like malls and started visiting public parks like Nehru Garden, Lodhi Garden over weekends. They realised that it was a definitely better option for the kids to spend some good time out as compared to just roaming around in malls. I have been a frequent visitor to all parks of NCR and can definitely see an almost 4 to 5x footfall over weekends as compared to pre covid times.